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million tonnes (40 per cent) by 2040, and 212 million tonnes India’s green steel exports could reach
(54 per cent) by 2047. This scenario demonstrates the US$26.2 billion by 2047, positioning it
feasibility of mainstreaming green steel if India acts decisively
by scaling hydrogen infrastructure, investing in H2-DRI as a leading global supplier
technology, and aligning policies to unlock private capital.
India’s unique structural advantages in production and cost
India’s significant cost advantage competitiveness provide a strong foundation for achieving
relative to major competitors makes it export competitiveness in green steel. To quantify export
potential, a gravity model framework is employed to project
a frontrunner in the emerging green bilateral trade flows and assess the country’s positioning in
steel market global green steel markets.

The gravity model, a well-established tool in international trade
Cost competitiveness constitutes the fundamental analysis, posits that bilateral trade flows are proportional to the
determinant of green steel's commercial viability and export economic size of trading partners and inversely related to the
potential. India's existing advantages in conventional steel distance between them. The model is constructed using a
production provide a crucial foundation, but the evolution of comprehensive panel of bilateral steel trade data from 2005 to
green steel costs will determine whether these advantages 2024, covering all trade classified under HS codes 7206 to
will translate into market leadership. 7229, which include both semi-finished and finished steel
products. Key explanatory variables in the model include the
Analysis by Devlin et al. (2023) indicates that India exhibits GDP and population of exporting and importing countries,
2
one of the strongest projected improvement trajectories geographic distance between trading partners, and crude steel
globally, with green steel costs anticipated to decline from production of the exporting countries.
US$749 in 2030 to US$599 per tonne by 2050, representing a
20 per cent reduction over two decades. This improvement Using a Generalized Linear Model with Poisson Pseudo
trajectory outpaces major competitors including the United Maximum Likelihood (PPML) estimation, the model addresses
States, Sweden, and Canada, and positions India common challenges in trade data, including zero trade flows,
competitively with China. India's key advantages lie in heteroskedasticity, and non-linear relationships. The estimated
abundant renewable energy resources supporting projected coefficients are then employed to forecast bilateral steel
low-cost hydrogen production, existing DRI infrastructure exports from 2025 to 2047, thereby defining the total market
enabling cost-effective conversion to H2-DRI without the framework within which green steel trade is expected to evolve.
massive capital expenditure required for new blast furnace
replacement, and competitive labour costs. Green steel export competitiveness is defined as a function of
production scale and relative cost efficiency, with the levelized
cost advantage measured as the cost difference between
conventional and green steel as a percentage of conventional
Green Steel Cost Evolution across Major Steel Markets steel cost.

At the global level, the reference scenario projects slow green
1000 steel adoption. By 2030, exports remain negligible at US$0.4
billion, rising modestly to US$4.5 billion by 2040. By 2047,
global green steel exports are projected to further reach
900
US$17.3 billion, commercially relevant but still small compared
Green Steel Cost (USD/Tonne) 700 Russia The clean scenario, in contrast, envisions rapid growth. Global
Sweden
to total steel exports projected to exceed US$500 billion.
800
USA
green steel exports are expected to rise to US$44.9 billion by
Australia
2030, surge to US$140.5 billion by 2040 with cost parity and
China
large-scale hydrogen deployment, and reach US$242.4 billion
Brazil
600
displacement of conventional steel.
Iran
500 India by 2047, reflecting mainstream adoption and significant
2030 2035 2040 2045 2050
India's current steel exports stand at US$7.1 billion in 2024,
entirely from conventional production. However, the country's
strategic edge as the world's largest DRI producer, with 38 per
Source: Pathways to Atmanirbhar Bharat, India Energy and
Climate Centre (IECC), UC Berkeley cent of steel output from the DRI route, positions it favourably
for green steel export development as the technology matures
and markets evolve.

1 Devlin, A., Kossen, J., Goldie-Jones, H., & Yang, A. (2023). Global green hydrogen-based steel opportunities surrounding high quality renewable energy and iron ore deposits.
Nature Communications, 14(1), 2578.
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